1. Field of the Invention
The present invention relates to the field of credit cards and, more particularly, to functions that may be established and executed to affect credit card accounts and transactions.
2. Description of the Related Art
Credit card transaction processing systems are well known. For example, the typical credit card transaction processing system involves a cardholder, a merchant, a credit card processor, and a credit card issuer. Usually, the cardholder presents goods or services to a merchant at a point-of-sale station where the merchant calculates a purchase price and asks the cardholder for payment. Thereafter, the merchant processes the cardholder's credit card through a point-of-sale unit or terminal which is configured to transmit transaction information such as the amount of the transaction, the credit card number, etc., to the credit card issuer for authorization. The transaction information is directed to the issuer, who is identified by the first four digits of the credit card number, either directly through a network connection or indirectly through a credit card processing service.
If the cardholder's account is in a state that is sufficient to accept charges contemplated by the transaction, the credit card issuer will authorize the transaction by generating and transmitting an authorization code to the merchant. At the same time, the credit card issuer usually places a hold or "freezes" the available credit line on the cardholder's account for the amount of the transaction. After receipt of an authorization code, a sales draft, slip or receipt is often printed out by the point-of-sale unit or some other device such as a cash register. Thereafter, the cardholder signs the draft acknowledging his obligation to reimburse the credit card issuer for the amount of the transaction. At this point, the merchant can collect payment for goods or services from the credit card issuer.
The aforementioned credit card transaction processing approach is functionally limited in that only basic sets of data can be collected and processed at the point-of-sale (e.g., credit card number, transaction amount, etc.). As such, various proposals have been made to enhance the credit card transaction and account processing systems and, in particular, to enhance the credit card processing system's ability to provide benefits to credit card issuers, credit card processors, merchants, and cardholders. However, no proposals to date have enabled either cardholders or merchants to spontaneously alter what transactions are to be affected by a discount or other offer such as a financing option.
For example, the U$AVE program offered by First Data Corporation (FDC), a credit card processor, is a program wherein merchants pre-arrange offers with FDC's issuers that allow targeted cardholders to receive discounts redeemable via credit card payment at a point of sale. This program requires merchants to first register with FDC by specifying target market parameters like zip code, purchase history, available credit line, the discount function (e.g., percent-off, dollars-off, etc.), and other purchase parameters (e.g., first purchases, all purchases, or phased-in purchases). FDC then sends out a customized statement of offers to cardholders of issuing banks that have agreed to participate in this program. At the time of a point-of-sale transaction, the merchant provides FDC with transaction information including a cardholder's account number. FDC then checks for any pre-registered merchant discounts and automatically applies the discounts to qualifying transactions.
From the merchant's perspective, the U$AVE program is not capable of offering the merchant the ability to offer discounts or financing options on an ad hoc basis. Such an ability would help merchants achieve incremental sales from those customers who are ready to buy but may need an extra purchase incentive. For example, customers who are concerned about high interest rates might make a purchase if they could finance their purchase interest-free for six or twelve months. U$AVE does not provide the merchant with the ability to make such spontaneous offers on an individual basis. The merchant is left with the conventional alternative of inconveniencing the customer to apply for a store credit card which the customer may not want and may not qualify for.
From the customer's perspective, the U$AVE Program restricts the customer's ability to receive discounts in several ways. The customer cannot choose "when" to receive the offered discount. For example, if a merchant offered 10% off, the customer would generally prefer to receive 10% off on a major purchase to maximize the benefit of the offered discount. U$AVE, however, restricts the application of the discount to the first qualifying purchase, with the unintended result of discouraging the customer from making minor intervening purchases at the merchant and thus depressing merchant sales. Moreover, U$AVE does not allow the customer to choose "which" merchant he would prefer to receive the discount from. Thus, the U$AVE program significantly limits customer choice. It presents the customer with fixed offers that are exercised, regardless of the customer's choice, simply by the presentation and use of the appropriate credit card.
The MASTERCARD PURCHASING CARD program offered by MASTERCARD allows merchants to provide supplemental information to credit card issuers via specially configured, non-standard point-of-sale units that are unique to the program. MASTERCARD cardholders can request that information such as a merchant category code, a supplier name, special accounting codes, supplier tax information, a 1099 status, a supplier zip code, quantities, product codes, product descriptions, freight amounts and duty amounts, be included on customer billing statements. This system is limited as it requires specially configured point-of-sale hardware. Furthermore, the supplemental information that cardholders can record on their billing statements is limited to fields specified by MASTERCARD, for example, supplier's 1099 status, zip code or tax information. In short, the system simply provides additional information to the credit cardholder without providing any additional functionality.
AMERICAN EXPRESS "EXPRESS REWARDS" and "CUSTOM EXTRAS" are programs that use credit card transaction processing systems to deliver enhanced value to their cardholders. With these programs, merchants can track AMERICAN EXPRESS cardholder purchase behavior and then reward customers for their loyalty based on that behavior. The EXPRESS REWARDS program automatically discounts purchase amounts at a cash register while the CUSTOM EXTRAS program alerts cardholders to savings from particular merchants on cardholder billing statements. Similar to U$AVE, these programs allow merchants to set criteria for defining cardholder discount eligibility. The criteria merchants may use to determine a cardholder's eligibility is limited to the cardholder's past purchasing performance. Once a cardholder's historical transaction data meets the pre-defined preference parameters, AMERICAN EXPRESS notifies the merchants via a POS system by transmitting a message indicating "preferred customer." The merchant can then discount the purchase at the POS. Consequently, the AMERICAN EXPRESS programs are merchant driven and are not capable of responding to any customer preferences or choices.
Another example of a limited enhancement to conventional credit card transaction processing systems is the inclusion of merchant messages on customer billing statements. Merchant messages involve systems operated by merchants, processors, and issuers to allow the inclusion of text-based messaging on customer billing statements. Such messages serve to communicate supplemental or new information related to goods or services purchased and may include customer service telephone numbers, product information, or advertisements. The usefulness of such information is limited as cardholders cannot specify the information that appears on their billing statements.
Each of the aforementioned systems and processes require either specially configured hardware, parallel transaction processing systems, or the pre-arrangement of transaction parameters. As such, the need for additional systems and processes can be costly, can diminish the intended value of programs requiring such additional systems and processes, and can limit the intended benefits to merchants and consumers. More particularly, previously proposed enhancements to credit card and related processing systems have not allowed cardholders and merchants to directly control the effects on a credit card account. Previously proposed enhancements also have not allowed cardholders to transmit data regarding transactions to their credit card issuers for later appearance on their credit card billing statements using the conventional POS infrastructure.
Accordingly, the shortcomings associated with the related art have heretofore not been adequately addressed. The present invention addresses such problems by providing a system and processing approach that have not previously been proposed.